Know about Tax Benefits That you’re Property Offer
Oct 22, 2016 Legal Guidance
Not all buy a house to make it a home. There are many who consider it to be an investment. This is so because by judicially investing money in real estate you can get a great financial return. Not only that, the government also offers several tax benefits to home buyers. That is how real estate investments have become a popular medium to save money.
The following points enlisted below will provide you with key tax-related benefits that you can avail if you have invested in real estate.
And by applying these ideas in your Income Tax Return File Assessment for the year 2015-16 you can measure your benefits.
Repayment of home loan principle
Section 80C of Income Tax (I-T) Act states that deduction of up to Rs.1.5lakh can be claimed for repaying of your home loan’s principal amount.
Stamp duty and other fees
As mentioned under Section 80C of the I-T Act, Rs. 1.5lakh as tax deductions can be claimed, on payment of stamp duty, property registration and other expenses incurred during the property transfer.
Home loans for property under construction
If you have taken a personal loan for an under construction house, then you can claim a tax reduction of Rs.2 lakh. Previously, in order to get the claims, the housing project had to be completed in three years. But eventually, it has been realised that in most of the cases completion of a construction within three years is not possible due to several natural and man-made obstacles. That is why in Budget 2016-17 Finance Minister Arun Jaitley has increased the time span to a period of five years.
The benefit given to First-Time home buyer
Finance Minister Arun Jaitley in Budget 2016-17 has announced a tax deduction of up to Rs.50,000 for first time home buyers who are paying interest on home loans. This incentive has been given to boost real estate investment market. But there are certain conditions that have to be fulfilled in order to be eligible for this benefit.
The criteria are:-
The following points enlisted below will provide you with key tax-related benefits that you can avail if you have invested in real estate.
And by applying these ideas in your Income Tax Return File Assessment for the year 2015-16 you can measure your benefits.
Repayment of home loan principle
Section 80C of Income Tax (I-T) Act states that deduction of up to Rs.1.5lakh can be claimed for repaying of your home loan’s principal amount.
Stamp duty and other fees
As mentioned under Section 80C of the I-T Act, Rs. 1.5lakh as tax deductions can be claimed, on payment of stamp duty, property registration and other expenses incurred during the property transfer.
Home loans for property under construction
If you have taken a personal loan for an under construction house, then you can claim a tax reduction of Rs.2 lakh. Previously, in order to get the claims, the housing project had to be completed in three years. But eventually, it has been realised that in most of the cases completion of a construction within three years is not possible due to several natural and man-made obstacles. That is why in Budget 2016-17 Finance Minister Arun Jaitley has increased the time span to a period of five years.
The benefit given to First-Time home buyer
Finance Minister Arun Jaitley in Budget 2016-17 has announced a tax deduction of up to Rs.50,000 for first time home buyers who are paying interest on home loans. This incentive has been given to boost real estate investment market. But there are certain conditions that have to be fulfilled in order to be eligible for this benefit.
The criteria are:-
- The cost of the property in which you have invested should not be more than Rs.50lakh.
- The loan taken for the purchase of the house should not be more than Rs. 35lakh.
- This loan must have been granted between April 1,2016 and March 31,2017.
Extra benefit for co-ownership property
Tax deduction of up to Rs. 5lakh for each of the co-owners of the property is given on repayment of the principal amount. Also, the tax deduction of Rs. 2lakh can be claimed by each of the co-owners on the interest paid. But this is possible only if the property that has been purchased for personal use and co-borrowed.
These basic information will surely come handy for a home owner while he/she is preparing Income Tax Return life for the year 2016-17.
Tax deduction of up to Rs. 5lakh for each of the co-owners of the property is given on repayment of the principal amount. Also, the tax deduction of Rs. 2lakh can be claimed by each of the co-owners on the interest paid. But this is possible only if the property that has been purchased for personal use and co-borrowed.
These basic information will surely come handy for a home owner while he/she is preparing Income Tax Return life for the year 2016-17.
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